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Ford pickup truck production is halted... maybe for weeks

A fire and two explosions at an auto parts supplier in the early morning of Wednesday, May 2nd has shut down Ford F-150 and Super Duty production at Kansas City Assembly Plant, Dearborn Truck Plant, Kentucky Truck Plant and Ohio Assembly in Avon Lake Ohio. Also affected is a Fiat-Chrysler assembly plant in Windsor, Ontario.

Meridian Magnesium in Eaton Rapids, Michigan makes auto parts for Ford pickup trucks and for Fiat -Chrysler. A fire on a line that moves magnesium scrap resulted in two explosions that ripped a hole in the roof of the facility and injured two people who were taken to hospital and later released.

The Wall Street Journal says Ford F-150 and Super Duty production may be interrupted for weeks.

There goes this year's profit sharing check.

War is peace.
Freedom is slavery.
Ignorance is strength.
Tribalism is family and extended family.
Trump is doing beautifully.

Re: Ford pickup truck production is halted... maybe for weeks

Originally Posted by Tom Montgomery

A fire and two explosions at an auto parts supplier in the early morning of Wednesday, May 2nd has shut down Ford F-150 and Super Duty production at Kansas City Assembly Plant, Dearborn Truck Plant, Kentucky Truck Plant and Ohio Assembly in Avon Lake Ohio. Also affected is a Fiat-Chrysler assembly plant in Windsor, Ontario.

Meridian Magnesium in Eaton Rapids, Michigan makes auto parts for Ford pickup trucks and for Fiat -Chrysler. A fire on a line that moves magnesium scrap resulted in two explosions that ripped a hole in the roof of the facility and injured two people who were taken to hospital and later released.

The Wall Street Journal says Ford F-150 and Super Duty production may be interrupted for weeks.

Re: Ford pickup truck production is halted... maybe for weeks

When I taught advanced composites construction at the local college I worked closely with an aeronautical components manufacturer whom had put significant money into the college program, and insisted that I teach the fundamentals of JIT manufacturing to my students. The management and engineering staff I worked with were ardent supporters of the 'just-in-time' supply paradigm, the former group because of the beneficial financing aspects of the system, the latter group because the well-ticking machine that was the production floor was just so damned cool. The department heads, whom I worked most closely with, absolutely hated it. Such minor incidents as a truck reefer unit failing in Ontario while transporting a few tons of pre-preg carbon fiber to the factory in Nova Scotia, rendering it unusable for aeronautical components, caused delays on the production floor that had a ripple effect up the line all the way to the parent company in France and to the customers in Seattle, Mobile, and elsewhere. While I think that the JIT paradigm has merit, I think that it should be modified for each individual application such that the inventory held on-site should have enough depth to allow for continued production during the time needed for recovery from a supplier incident. I realize that this costs money, but is the risk of shutting down production worth the savings if not done?

Re: Ford pickup truck production is halted... maybe for weeks

Originally Posted by genglandoh

This points out the need to at lease 2 suppliers for parts.

Meridian Magnesium has approx. 1700 parts on hand that need to be coated. There is no other ISO certified plant in the USA that can do this. So those parts will be shipped to Europe and then shipped back to the automakers.

War is peace.
Freedom is slavery.
Ignorance is strength.
Tribalism is family and extended family.
Trump is doing beautifully.

Re: Ford pickup truck production is halted... maybe for weeks

Originally Posted by mmd

When I taught advanced composites construction at the local college I worked closely with an aeronautical components manufacturer whom had put significant money into the college program, and insisted that I teach the fundamentals of JIT manufacturing to my students. The management and engineering staff I worked with were ardent supporters of the 'just-in-time' supply paradigm, the former group because of the beneficial financing aspects of the system, the latter group because the well-ticking machine that was the production floor was just so damned cool. The department heads, whom I worked most closely with, absolutely hated it. Such minor incidents as a truck reefer unit failing in Ontario while transporting a few tons of pre-preg carbon fiber to the factory in Nova Scotia, rendering it unusable for aeronautical components, caused delays on the production floor that had a ripple effect up the line all the way to the parent company in France and to the customers in Seattle, Mobile, and elsewhere. While I think that the JIT paradigm has merit, I think that it should be modified for each individual application such that the inventory held on-site should have enough depth to allow for continued production during the time needed for recovery from a supplier incident. I realize that this costs money, but is the risk of shutting down production worth the savings if not done?

A good example is a product I'm working on. I need resistance heaters for the thing. Because it is for airborne use, it has to be a certified vendor. The preferred vendor went from having quite adequate stock when I put in the order, to a 17 week lead-time overnight, so I'm out of luck for a job that needs to ship in 6 weeks. I now have to jump through hoops to find a similar substitute part and get the vendor certified. While folks would ask "why don't you have multiple certified vendors", for this, we could have, but we are a small company and finding and certifying new vendors and products is time consuming and expensive. There are also some products we use for which there is quite literally only one vendor. In the world.

"The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."
-William A. Ward

Re: Ford pickup truck production is halted... maybe for weeks

JIT inventory is (IMHO) modern day business school thinking - devised by people who have never worked in the real world. Can inventory acquisition be streamlined? For sure, but 100% JIT is a pipe dream - subject to issues just like this.

Coming home from college, I had an accident caused by MEK spilling on cloth near the rear heater of a VW bus & the soaked cloth caught on fire. It then got the 3 5 gallon cans of polyester resin hot enough to rupture the cans & start burning. The burning resin then burned through the floor & got to the magnesium casings of the engine & transaxle which then started burning.

1) shouldn't have replaced the heater boxes
2) the flames were 50 ft. high & shut down Int. 90 going east for a couple of hours
3) even though the fire department brought a foam truck, the magnesium basically had to finish burning before they could get the fire out.

Re: Ford pickup truck production is halted... maybe for weeks

According to the texts that I used to teach JIT to my classes, JIT is a segment of the "Lean Production" process devised by Toyota in Japan in the 1950's. The Toyota Production System (TPS) was developed by Taiichi Ohno, who was certainly not a person who never worked in the real world - his mantra was that "all education in production systems is learned on the production floor". He was notorious for admonishing his underlings who were trying to codify the TPS in book form that if they had time to sit and write a book, they certainly had time to be out on the production floor, being productive. However, the system administration and continuing development has certainly been taken over by office-bound technocrats.

Re: Ford pickup truck production is halted... maybe for weeks

"No plan survives first contact with the enemy." Should be lesson #1 in JIT/Lean classes.

We had an MRP system at my last employer's that was based around the DBR (Drum, Buffer, Rope) method. That's one of the few that I saw being reasonably managed in a production environment. The "drum" is the pace of production, the buffer gives you some slack in the system to absorb change and the rope prevents any element from stretching the rope too far and out-pacing the rest of the system.

"The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."
-William A. Ward

Re: Ford pickup truck production is halted... maybe for weeks

the JIT pendulum is just starting to swing the other way in this industry, which is to say that enough of our customers have lost $5m product batches over a long-delivery part that they're starting to pay attention to it.
Their managers still won't let them stock spares on-site, though. The new plants don't even have space for it.
Instead they want us to stock a certain quantity specially reserved for them, which they may (or may not) call for on a moment's notice, to which we reply "No problem, the cost is now $X+15%"

Re: Ford pickup truck production is halted... maybe for weeks

A fire and two explosions at an auto parts supplier in the early morning of Wednesday,

The Wall Street Journal says Ford F-150 and Super Duty production may be interrupted for weeks.

Auto manufacturing is not a critical industry. It would cost a significant amount of resources to ensure against a stoppage. It seems that Ford has 84 days of inventory on dealers lots. Enough for a month of so before shortages appear. Life happens. Ford has people who know how to get things going.

Re: Ford pickup truck production is halted... maybe for weeks

Ford suspended all production Wednesday of its profit-driving F-150 pickup, the nation's best-selling vehicle for more than 35 years, because of a "black swan" parts shortage.

The production halt was caused by a fire May 2 at a parts factory in small-town Michigan that rippled through the North American auto industry but hit Ford hardest. Production at General Motors, Fiat Chrysler and Mercedes also was disrupted.

"The impact on everybody else is going to pale compared to Ford," said Abhay (Abe) Vadhavkar, director of manufacturing, engineering and technology at the Center for Automotive Research in Ann Arbor. "For Ford, this is potentially enormous."

Joe Hinrichs, Ford executive vice president and president of Global Operations, acknowledged in a briefing late Wednesday, "We have to rebuild the whole supply chain."

F-150 trucks make up a multibillion-dollar brand that drives profits for the Dearborn-based automaker. An analyst recently calculated that the enterprise value of the F-Series trucks is greater than that of Ford overall. Nearly 900,000 were sold in 2017 at an average cost of $46,000. And January through April sales are up 4% from the same time last year.

This week, the truck side of the Ford Kansas City Assembly Plant in Missouri shut down and about 3,400 workers went home because of the parts shortage caused by the fire at Meridian Magnesium Products in Eaton Rapids, said Kelli Felker, Ford spokeswoman.
Late Wednesday, on the eve of the annual shareholder call, Hinrichs announced that the Dearborn Truck Plant would shut down at the end of the day's second shift, affecting about 4,000 workers.

The F-150 is built only at the two sites.

The length of the production halt has not been determined.

"The situation really is hour to hour," Hinrichs said. "It's safe to say we’re going to see an impact of several days."

The supplier, Chinese-owned Meridian Magnesium Products, has not confirmed timelines. UAW officials have warned Ford workers to be prepared for layoffs.

"Ford has 100% of its truck radiator supports in North America coming out of the Eaton Rapids facility," said Vadhavkar, who worked with Meridian Magnesium before retiring in September 2017 as Ford's senior manager for stampings, structures and raw materials for supplier technical assistance in purchasing North America.

"You don't have multiple suppliers for a complicated part like this one. You have specialty manufacturers because it's more efficient," he said. "And you can't just take molds for the casting and ship them to another plant or supplier overseas."

Meridian is the No. 1 supplier in North America for the magnesium radiator support structure, the part that holds radiators on Ford trucks. Magnesium is a light metal that adds little weight and helps with fuel efficiency. When the radiator is filled with coolant, which has the approximate density of water, it gets heavy. So the magnesium radiator support structure hangs on the vehicle providing support.

Meridian Magnesium Products of America was acquired by Wanfeng Auto Holdings Group in 2013.

"This company is the only supplier in North America that has the ability to supply this product at the volume Ford requires," Vadhavkar said.

Ford officials confirmed that Meridian produces the "front bolster," which structurally reinforces the engine where the radiator is attached, for the F-150, Super Duty trucks, Expedition and Navigator. The supplier also makes a third-row seat cushion pan for the Ford Explorer, Ford Flex and the Lincoln MKT, and a lift gate for the MKT.

Sources in the auto industry said privately that factories could be down for "several weeks." They're concerned about causing alarm among investors and workers.

84-day supply of trucks

Eaton Rapids Fire Chief Roger McNutt said Wednesday, "I would guess about three-quarters of the production area was affected. They're in there trying to clean that up and get that going again. They plan on being up and running within a couple weeks."

Meridian officials couldn't be reached for comment.

Ford has an 84-day supply of F-Series trucks, according to Erich Merkle, U.S. sales analyst for Ford.

Already, the automaker has sold 287,295 F-Series trucks this year.

"When you have a vehicle that comprises a quarter of your company’s sales, any production disruption is going to cause some consternation," said Ivan Drury, Edmunds senior manager of industry analysis. "This demonstrates the riskier side of Ford’s strategy to put all its eggs in the trucks and SUVs basket — when you’re more dependent on only a few models to drive sales, the company’s bottom line is much more sensitive to these kinds of unplanned setbacks."

Meridian had a small fire at the plant a year or so ago, but it was contained to one of their molding or casting machines, Vadhavkar said. Magnesium is pressure-fed into a cast and then rapid cooled, sort of like making Jell-O.

The material is essential for Ford trucks.

In April alone, Ford built 29,572 trucks in Kansas City and 31,482 trucks in Dearborn.

UAW workers who are displaced may file for unemployment and there’s supplemental pay that provides up to 95% of wages after a certain point, based on timelines and other factors.

Workers routinely navigate uneven production schedules and periodic shutdowns, but this current situation carries the potential for long-term impact, analysts say.

On a side note, the Kansas City plant also builds the Ford Transit with the help of about 3,400 workers. They have not been affected by the shutdown, Felker said.

Meanwhile, production of the Ford Super Duty trucks has stopped, but no layoffs have occurred, she confirmed. The Kentucky Truck Plant in Louisville and the Ohio Assembly Plant in Avon Lake, the only sites where Super Duty trucks are built, are not scheduled for shutdown. Felker said Ford has continued manufacturing Expeditions, Navigators and other large vehicles uninterrupted.

'Black swan event'

Hau Thai-Tang, executive vice president, product development and purchasing at Ford, called the current situation a "black swan event" and noted that the team has worked with the supplier to recover 19 tools required to manufacture needed materials.

"Meridian contacted us within five hours," he said, so Ford could immediately assess structural damage and inspect tools and dies and "get them out of there as quickly as possible."

Ford said Meridian is working to utilize its facility in Strathroy, Ontario.

The fire also affected production of the Fiat Chrysler Automobiles plant in Windsor, Ontario, that produces the Chrysler Pacifica minivan.

Fiat Chrysler spokeswoman Jodi Tinson said, "The company is adjusting production schedules as needed to minimize plant downtime, but will make up any lost production. FCA continues to work with the supplier’s team on recovery efforts."

Windsor Assembly employs 6,100 workers on three shifts, according to a company fact sheet.

In addition to the Pacifica and Pacifica Hybrid, the plant produces the Dodge Grand Caravan. The Jeep Wrangler is not affected, Tinson confirmed.

GM temporarily halted production on Wednesday of its Chevrolet Express and GMC Savana full-size vans at its Wentzville, Mo., plant because of the supply chain constraint, said GM spokesman Nick Richards.

The plant will continue to produce the midsize Chevrolet Colorado and GMC Canyon without interruption, he said. The company is working to resume van production "as quickly as possible."

Richard noted that GM does get parts from Meridian for other vehicles and has been able to identify alternative supplier sources in the short term.

Michelle Krebs, executive analyst for Autotrader, said no one knows how long the supplier will be crippled.

"In the last decade or so, automakers have gone to fewer suppliers to make more of the parts across more model lines," she said. "It's to simplify manufacturing by dealing with fewer suppliers. But when something like this happens, the effect is massive."

Mercedes-Benz in Tuscaloosa County, Ala., released a statement to local media noting part of the Vance plant was shut down and production shifts canceled for workers May 6 through Wednesday because of the Michigan fire "until an assessment and recovery plan is confirmed."

A spokesman for Mercedes, which uses magnesium for its vehicle cockpits, said the situation is unchanged and the company would have an update later this week or Monday.

The Lansing State Journal reported that portions of the Meridian plant, which is located just south of Lansing and employs about 400 people, remain open. The fire and explosions damaged the main plant's roof.

The blaze occurred about 1:30 a.m. and included a series of explosions.

Despite the damage at the 208,000-square-foot plant, some workers were told they could return to work that day, the State Journal reported. “The blaze apparently originated in an area of the plant called the ‘tunnel,’ where workers put magnesium scraps on a conveyor belt to be melted down."

City officials are discussing setting up of a temporary food bank program in anticipation of a possible long-term shutdown.

War is peace.
Freedom is slavery.
Ignorance is strength.
Tribalism is family and extended family.
Trump is doing beautifully.

Re: Ford pickup truck production is halted... maybe for weeks

Originally Posted by Too Little Time

Auto manufacturing is not a critical industry. It would cost a significant amount of resources to ensure against a stoppage. It seems that Ford has 84 days of inventory on dealers lots. Enough for a month of so before shortages appear. Life happens. Ford has people who know how to get things going.

Critical to whom? The auto workers may be OK for the duration, but an amazing amount of other companies and workers support the auto plants. By example, when my manufacturing plant shut down in 2014, only 400 or so were directly unemployed BUT if you include contractors and support companies over 1,500 jobs were affected.

Re: Ford pickup truck production is halted... maybe for weeks

Originally Posted by mmd

According to the texts that I used to teach JIT to my classes, JIT is a segment of the "Lean Production" process devised by Toyota in Japan in the 1950's. The Toyota Production System (TPS) was developed by Taiichi Ohno, who was certainly not a person who never worked in the real world - his mantra was that "all education in production systems is learned on the production floor". He was notorious for admonishing his underlings who were trying to codify the TPS in book form that if they had time to sit and write a book, they certainly had time to be out on the production floor, being productive. However, the system administration and continuing development has certainly been taken over by office-bound technocrats.

JIT was developed in Japan during WWII, as part of a system intended to decentralize war production in the face of allied bombing attacks. Statistical quality control was developed in the U.S. as a method of non-destructive testing for munitions manufacturing. Both have been credited as ways of dramatically reducing manufacturing defects.

Re: Ford pickup truck production is halted... maybe for weeks

Originally Posted by Too Little Time

Auto manufacturing is not a critical industry. It would cost a significant amount of resources to ensure against a stoppage. It seems that Ford has 84 days of inventory on dealers lots. Enough for a month of so before shortages appear. Life happens. Ford has people who know how to get things going.

FWIW, Ninety days inventory usually is considered a minimum for auto retailing. It's a calculated number that does not reflect whether the vehicles are the ones customers want. As for single-sourcing, not so long ago, it was unheard of, just because this could happen. In today's world, some suppliers are both bigger and more critical than any individual auto company. The enterprise is tightly and globally linked. FWIW, this supplier is owned by a Chinese company.

Re: Ford pickup truck production is halted... maybe for weeks

Originally Posted by Tom Montgomery

A fire and two explosions at an auto parts supplier in the early morning of Wednesday, May 2nd has shut down Ford F-150 and Super Duty production at Kansas City Assembly Plant, Dearborn Truck Plant, Kentucky Truck Plant and Ohio Assembly in Avon Lake Ohio. Also affected is a Fiat-Chrysler assembly plant in Windsor, Ontario.

Meridian Magnesium in Eaton Rapids, Michigan makes auto parts for Ford pickup trucks and for Fiat -Chrysler. A fire on a line that moves magnesium scrap resulted in two explosions that ripped a hole in the roof of the facility and injured two people who were taken to hospital and later released.

The Wall Street Journal says Ford F-150 and Super Duty production may be interrupted for weeks.

There goes this year's profit sharing check.

scary, glad it wasn’t worse. We’re back in our old space 18 mo. after an electrical fire burnt a corner of the adjoining space. Hope reconstruction goes faster than here.

Re: Ford pickup truck production is halted... maybe for weeks

Dan, not that I doubt your word, but would you provide a reference for your assertions in post #26 re: when & why JIT was developed, please? I have colleagues in the tech college system here who would like to have that information.

Re: Ford pickup truck production is halted... maybe for weeks

Originally Posted by mmd

Dan, not that I doubt your word, but would you provide a reference for your assertions in post #26 re: when & why JIT was developed, please? I have colleagues in the tech college system here who would like to have that information.

Sorry for the delay, just saw this. You could start here: http://www.cirje.e.u-tokyo.ac.jp/res.../2010cf755.pdf It's an obtuse analytical paper on wartime Japanese production. It has some references that also address the issue. The idea is that decentralized production of components was a key element in production of armaments. The logistics of this system led to the postwar Kanban system of inventory control developed mainly by Toyota. The notion that limiting in-process inventory helped quality control is mainly based on the observation that by limiting inventory, you also limit bad parts, making it easier to make corrections. The Deming methodology is a way of monitoring the quality of in-process components.
The idea that it saves cost is mainly an accounting issue, although that is based on the idea that you don't get paid until something is sold, not when it is under construction.

Re: Ford pickup truck production is halted... maybe for weeks

Tom,

I'd be interested in hearing about the arc of your career. You've been there for years, eh? Maybe you've told it before and I missed it? How'd you start there and how's it been? Stuff like that. Also, what are your thoughts on robotics? I saw a vid the other day of Subaru cars being assembled without many humans present. It was a wild ballet of machines.